Ted Simons: Good evening and welcome to "Arizona Horizon." I’m Ted Simons. Joining me tonight are Jim Small of the "Arizona Capitol Times," Mike Sunnucks of "The Phoenix Business Journal," and Luige del Puerto of "The Arizona Capitol Times."
Ted Simons: A former house staffer is indicted by a federal grand jury for allegedly using campaign funds to pay off personal expenses. Who is John Mills?
Jim Small: John Mills was a house staffer until May and he worked at the house off and on for the better part of 15 years or so. Primarily in the last year and a half, his job was redistricting. He was the point man for the legislature, their staff person that was keeping an eye on the redistricting process. He was at every meeting, kind of the guru and the guy they entrusted with following that and keeping everyone up to date on where that was going. The allegations, 15 counts of wire fraud as related to the investigation of Ben Arredondo who was indicted earlier this year on corruption charges, public corruption charges, the allegations are basically that he took somewhere about, $150,000 at the time the house speaker's account and used it for his own personal use, paid his mortgage, did some investments, bought some stock, invested into a company that did biofuels that ended up going bankrupt, using it for other personal expenses and repaying the money and so during the course of this investigation apparently the feds got wind of this and looked into it and put together a pretty comprehensive entitlement that -- indictment that shows how this money got spent.
Ted Simons: And it sounds like they say no big deal, he paid it back with interest. The feds are saying it is a big deal.
Mike Sunnucks: You can't steal something and just give it back. It's like going to the bank and obviously, doing that. But you've got a number of public integrity type of investigations that are going on, the Fiesta Bowl has been going on for a long time. They still haven't sentenced Mr. Junker who's been cooperating, the cooperation of the COO of the Fiesta Bowl. This could be related to that, starting to fall from that.
Ted Simons: Fallout from the case it sounds like -- are we going to get a little drop of water here as time goes by? We've got another staffer, another underling? What’s going on?
Luige del Puerto: That's been what's going on. We saw the fallout of the fiesta bowl scandal and we know for sure that when Jim Wires -- Jim Wires had the impression that they were really going after him and it was in the course of trying to go after him that they found out about the malfeasance that John Mills has done. The sort of prevailing sentiment in the state capitol is that this is all tied together.
Ted Simons: Interesting. And I know that from a distance, you hear Wires basically saying no big deal, he paid it back with interest, his life's all turned upside down because this just isn't fair. That seems a little bit of a surprising response. What's that all about?
Jim Small: Well, two things are surprising about that. One, He's basically acknowledging yeah, this guy stole money from me, which cannot be good for John Mills' defense if he’s going to go into court and said he didn’t do anything wrong. I mean, you’ve got the guy saying that yeah he took money from me but I’m okay with it. Certainly doesn’t do any favors for him on that end. Number two, I mean, it does show that wires is defending that guy. And one of the reasons that might be, is because if they are indeed trying to go after Jim Wires and if that is the point of the investigation, probably behooves him to be loyal to someone who's been loyal to him over the years, which is one of his closest advisors. He was widely known being together. That was obviously a relationship that was very strong.
Ted Simons: And obviously, the campaign treasurer, as well which allowed him access to the fund.
Jim Small: And that's another part of this whole story is not only did he take the money but they filed false reports to say that we have $138,000 in this account. Well, you don't, you've got about $10,000 in there. So that's another kind of wrinkle to this.
Mike Sunnucks: In the first case, you had Greg Stanton's treasurer back a couple of years ago, she got in trouble, too, similar charges, and, of course, Jerry Wires is running for mayor out in Glendale, we'll see if the democrats on the other side are going to scour to see if there's any type of tertiary connection.
Ted Simons: Not a firm connection but does the name get dragged through the mud?
Mike Sunnucks: I think so. People don't know that much about either candidate out there. They are brothers. It's not a positive influence.
Ted Simons: S.B. 1070 never goes away. It seems as though the latest attempts to block the papers please provision that was denied. Talk to us about that.
Mike Sunnucks: The ninth circuit denied that. That's one where law enforcement should ask folks about their immigration status if they have some idea that they should ask about that. Like you said, it never goes away. 1070 is the new Joe Arpaio. The same groups that go after the sheriff are going after this law. They're going to probably try some other ways to appeal this. But the law for the most part, the guts of the law, has withstood most of the challenges, that's a win for the governor.
Ted Simons: And the governor trying to get another win on another part of S.B. 1070 and this deals with the harboring of undocumented immigrants.
Luige del Puerto: There's a little-known provision that says in the course of the police citing you for a first offense that you cannot be transporting or harboring an undocumented alien in your vehicle, for example, and basically two years ago when the judge that was involved in this made her initial ruling on 1070, she said that this was okay, this is fine, this is something that the state could do to make it a state crime to harbor an illegal alien. And then earlier this month, she changed her mind and basically said this is something that the federal government has already acted on basically. We have a federal law that says you can't do this and therefore, that's preempting our state law and basically, she said that this law is not constitutional.
Mike Sunnucks: It's really aimed at the transporters, the rings, the coyotes that bring people in and transport them into Phoenix, into Arizona, and then they get dispersed into other markets and the state will argue we're just trying to complement the federal law, we're not trying to usurp it and it comes back to the gist of the immigration arguments. What the state role is versus the feds, the folks that want to enforce these things and want to go after them think the state has a bigger role. The folks on the other side want the feds to do it.
Ted Simons: Is this the kind of thing in terms of the political season, this is considered a positive for a certain side or a negative, the continued emphasis on S.B. 1070?
Jim Small: I don't know what kind of role it's going to play. They're focused on jobs and the economy right now. That's what we're hearing out of all the campaigns. It's not like two years ago which is what everyone said jobs and economy was the most important and immigration took over. Immigration is still a factor and it's going to play some role, but I think a lot of candidates aren't emphasizing it, they aren’t making it a big deal, they're really trying to focus on economics.
Mike Sunnucks: I agree. I think the only thing could be is if Hispanics are turning out in force for democrats for the president because of the immunity for the dreamers move. This could help that. Obviously, in the sheriff's race, I think maybe this emboldened Arpaio's base of voters because that's his issue. But I’m with Jim. For other races, I don't think this is as big an issue as the economy.
Luige del Puerto: The issue of immigration crops up every now and then. But it has not been sustained as a campaign issue. President Obama recently announced the deferred policy, the idea that the young undocumented immigrants, they can stay here if they met certain requirements and that was a huge issue, and then it died down and then we have this developments in the lawsuit of S.B. 1070, and now we're talking about it, but the issue of illegal immigration has not been sustained in this campaign.
Mike Sunnucks: Part of that is because Romney has backed away from the more hardline approach in the primaries, especially against Gingrich and he hasn't made it an issue. Obviously, in some states, it's been a successful issue. You look at Jan Brewer, you alienate Hispanics but you appeal to conservatives and people that want the immigration laws enforced better.
Ted Simons: The Pearce family, it's a different story.
Mike Sunnucks: Absolutely.
Ted Simons: Klein looking at moving out of the ninth floor and taking on the president of the Arizona board of regence. Who is she and how much responsibility does she have?
Jim Small: Klein is Governor Brewer's chief of staff, has been in that role since late 2009. She's the second chief of staff to Governor Brewer. When she was brought in, there was a lot of criticism of Governor Brewer's administration, a really rocky year. Whether it was warranted or not, a lot of that blame was taken by her first chief of staff. Klein was well respected. Klein worked for an insurance company in the valley. Prior to that, she had worked it at the legislature as a budget director, well respected as an organizer, and she went in and by all accounts has whipped that office into shape and she has a lot of respect in the community and there are a lot of people who see all the good work that Governor Brewer has been able to accomplish, as a direct result of Klein being in that office.
Ted Simons: There's nary a discouraging word when it comes to Klein. You don't hear things out there. All you hear about is how the governor's office was this way, now it's like this and she gets a lot of the credit.
Mike Sunnucks: She gets a lot of the credit.She's been known to play some hardball with people who cross the governor, but the chief of staff tends to do that. I believe she was also at the dancing with the stars, the fateful one, I believe she won that competition.
Ted Simons: My goodness. It all ties together.
Mike Sunnucks: Obviously, you'll see some other folks leave the governor's office as her second term ends.
Ted Simons: Talk about leaving the governor's office. How does this impact what happens in the 9th?
Luige del Puerto: In a big way. I think the presumption is that the governor must have a chief of staff as soon as possible, assuming she does leave that position and certainly, that's a big role to fill. Fortunately for the governor, she has a deep bench. She's got several guys that are part of her inner circle that can fill that role.
Ted Simons: Names?
Luige del Puerto: Some names that have floated include Scott Smith, for example, the current director for ADOA and he's been there for quite a while and there are a couple of other agency directors that may also, you know, be considered for that role.
Mike Sunnucks: Well, it's a very important position because Governor Brewer's not a hands-on governor, she's more of a big picture, go to events, do speeches governor whereas maybe Janet Napolitano was very detail oriented and the boss of everyone on the ninth floor. It's a very important kind of day-to-day functioning job.
Ted Simons: So do you see this being a pretty big impact should she leave?
Jim Small: If she leaves and it's important to note she's applied for this job and interviewed for it this week and we're not going to know more. Next week, we'll know who the finalists are, they're going to narrow it down to two. If she leaves, it will have a big impact and it will be crucial for the governor's office to bring in somebody who can try to fill the shoes and really is detail oriented and task -- task oriented.
Mike Sunnucks: At one point, the commerce authority, they were considering her. She had a lot of experience in healthcare. If she doesn’t take this one, there's a lot of other opportunities out there, public and private sector.
Ted Simons: Okay. What about prop 204? We're going to talk about the campaign funds. We're seeing what's being raised. We're also getting some questions as to whether or not the stuff that was raised was reported in time. Talk to us about that.
Luige del Puerto: Yesterday, the campaign both those who are supporting prop 204 and against it filed their reports. We saw that in the case of the campaign that they raised $550,000. The bulk of the money came from a handful of individuals and groups. One organization, for example, an independent expenditure group, forked out $500,000 and there was a question by those who are supporting about it --
Ted Simons: Education sales tax prop.
Luige del Puerto: The one sales tax initiative, the people who were supporting the initiative questioned whether the no campaign has reported those contributions as soon as they were reported. According to law, they should have been reported within 24 hours. We saw the reports today that showed those three organizations that gave them $600,000, gave them the money to the campaign on September 17 and was reporter September 18. We answered some of the questions surrounding it. If they could show the check that would show the date when they were given to the campaign, and I think that's the main way we would get a definite answer that they did indeed follow the law.
Mike Sunnucks: There's so much litigation going on with the ballot measures, the top two nonpartisan primary thing, the sales tax thing, it's a new tactic that both sides on these measures are taking on now to put the other side in court all the time to fight them on technicalities. Some of the things may be legitimate violations. A lot of them are just technicalities, paperwork, there's so many rules to follow, people file things on time. It's a way to try to get your opponent spending money on lawyers, focused on legal things and not being able to get their message out and in long term, if you have a grassroots campaign, you're just a farmer out there or joe blow and you're trying to get something on there, it's discouraging because you can't fight these things in court like some of these more organized groups. It goes counter to what maybe we want to see out of the ballot process.
Ted Simons: You mentioned some questions were answered. Do we have proof that they did this? Do we have proof?
Jim Small: Well, that's what the people say is there is there is no proof. They have yet to show us a check. Basically, their complaint hinges on a quote that the chairman of the anti-initiative group that he said essentially that we've already got six figures lined up, we're ready to go and they said well wait a second, he told you guys two weeks before they reported this money. They had gotten commitments from people and they said we were talking about moneys that were promised to us but money we didn't have in our hands, once we got the money in our hands, we did what we were supposed to do, deposited the checks, turned around and filed this paperwork. We'll find out next week. The campaign has a deadline to respond to that complaint and I would imagine that if they can prove it, they're going to prove it.
Mike Sunnucks: You're seeing him take the lead on this.
Ted Simons: Doug Ducey is very good, debating the issue. Is this -- obviously, he has higher ambitions in mind, it's relatively obvious. Does this help or hurt?
Mike Sunnucks: From a Republican conservative side, I think it helps. He obviously was looking at statewide office, won the treasurer office. He's looking at running for governor, for congress, for U.S. Senate, he was the CEO of Coldstone. Got private sector experience and I think in a Republican primary, if you can say I fought this sales tax increase, that has some appeal. Whether it has an appeal in general elections against somebody is another question but certainly with Republicans, it would.
Ted Simons: Win or lose, it's a win for him?
Mike Sunnucks: I think it's a win. Nobody knows who the state treasurer is. This puts him on the map.
Ted Simons: Corporation commission, back to funding now, this business of not reporting and taking money that's supposed to be used for "X" and you're using it for "Y." Republican candidates were using general election money for primary elections or vice versa?
Luige del Puerto: Vice versa. The allegation was that they used about $230,000 combined on two mailers that then attacked their democratic opponents. They were using the money for general election purposes. The elections commission staff investigated and agreed with the charge that they had used primary funds for general election purposes, which is a violation of state statutes and also, a violation of campaign finance rule for publicly financed candidates. The other day, the clean elections commission, the commissioners agreed with that finding and also voted to have them pay back the three Republican candidates pay back $30,000 from the general election money.
Ted Simons: And the candidates did deny any wrongdoing but they paid back the money anyway.
Luige del Puerto: And it's been done before for candidates to settle an allegation by saying we'll pay them out without admitting any guilt.
Ted Simons: One more thing about funding and not paying back -- he's still not paid that money back.
Luige del Puerto: He's not paid that money back.
Ted Simons: How much are we talking about here?
Luige del Puerto: $39,000. He was fined $31,000. The interest has accrued and now, it's $39,000. And also in that same clean elections meeting by the commissioners, they also -- the attorney general presented, Doug offering to pay half of the $39,000. And we don't know exactly what they discussed because they went into an executive session. We can surmise that they did not accept the proposal, it seems like they might actually try a counterproposal and make him pay more than what he was offering them.
Ted Simons: That's lasted an awfully long time, that particular story.
Jim Small: That story has lasted an incredibly long time. That's the percentage from the 2008 election. He got tossed out of office in the middle of 2010 and here we are two years later, he's running for office and he still hasn't paid the money, even though in May, it was April, it was in April, he signed a court document saying that he would pay back the whole thing. It’s never ending It's fertile ground for his opponents in this race.
Ted Simons: How is this race shaping up?
Luige del Puerto: He is a three-way race running as an independent candidate. And you can see that they are using this issue against him during the clean elections sponsored debate the other night. He says we have a guy running who has broken the law and hasn’t paid back the fines. Last Wednesday, that was his deadline to pay the fine. He was given the deadline to pay the fine or come up with a payment proposal. But his opponent said gosh, it's been such a long time, when are you going to pay your fine? And he hasn't.
Ted Simons: Okay. Okay. I'm sure we'll talk about that again, maybe in two more years. A few minutes left here. We've got some polls coming out here, high ground had a poll released and other surveys, as well. It sounds as though the once-invincible leads in Arizona are tightening up. What’s happening?
Mike Sunnucks: I think the democrats have some good news. I think they want to be on the offensive here. The Flake-carmona race, there's several polls that show that closer than people expected, three points, a couple of polls show the presidential race closer. There was a Rasmussen poll that shows it at 10, Romney’s up by 5, that's a lot less than John McCain. The carmona folks are excited and democrats look at those three competitive house races and they think they can maybe sweep all those. We might be red for the presidential race but on some other races, it's pretty tight.
Ted Simons: Is this the kind of thing that could filter down to some of the lower ballot races, the down ballot contests?
Jim Small: It's interesting here. I think you're going to get a lot of ballot splitting, which is something we didn't see two years ago. Two years ago, it was such a Republican tidal wave that voters, independent voters especially. They went into the ballot box and they just checked all the Republicans. And I don't think you're going to see that this time. I mean, Romney, you know, is likely to win the state, but at the same time, you're going to have a lot of people who vote for Romney and then who turn around and vote for carmona or who vote for the democrat in their congressional district, Anne Kirkpatrick but they vote against Obama. So that's going to be what's interesting to see is how those local races and how they're able to go out and get either Republicans or independents to, you know, split their ballot between two parties.
Mike Sunnucks: The democrats in those congressional races happened because of the way the lines were drawn. Barber has a lot of sympathy because of sympathy because of being shot with Gifford. There's an advantage there. Jim's right, this carmona race is starting to be a real wild card. I don't think they expected it to be close right now and they'll have to change their tactics a little bit and be a more aggressive campaign. Carmona's hitting him hard on votes against veterans.
Ted Simons: Makes you wonder if that carmen race. If the Obama campaign throws some money in Arizona, let's see what happens. That means resources from Romney have to be directed to a place where let's face it, he was considered a lock and still is in many respects.
Luige del Puerto: I think the prevailing sentiment is this is one state that has a significant Mormon population, still a Republican state, despite democrats' aggressiveness but it would be interesting to see if those tickets would impact the down race.
Mike Sunnucks: I think the way the race is going is a disadvantage for Republicans right now. They thought the economy was the issue but the democrats and Obama have portrayed this as you're in the middle class, you're insecure,- your house, your job- and here's a guy, is he going to protect you? And people don't trust him right now and I think the Republicans do better when the race is about security, foreign policy, and maybe leadership and maybe social issues and the economy. People are insecure and they don't feel secure about the Republican message right now.
Ted Simons: Before we go quickly at the state legislature, any chance your house or Senate is split or goes in a direction it hasn't been in a while?
Jim Small: Sure. There's a chance. I don't think it's a big chance. You know, it's certainly not likely. I think the Senate, there is a far better chance as small as it may be that the democrats split the Senate but in the house I don't see that happening.
Ted Simons: Same thing?
Luige del Puerto: I don't think that the democrats will get enough seats in order to split the house or the Senate.
Ted Simons: We'll stop it right there. Thanks for joining us.
Ted Simons: Monday on "Arizona Horizon," a clean elections debate featuring candidates running for three open seats on the Arizona Corporation Commission, which regulates Arizona’s public utilities. Join us for an hour-long debate at a special 5:00 p.m. start time Monday on "Arizona Horizon." Tuesday, we’ll look at Proposition 119, which amends the state Constitution to allow state trust lands to be exchanged for other public lands. Wednesday, a debate on proposition 120, which amends the constitution to give Arizona exclusive control over public lands in the state. Thursday, we’ll look at research on the causes and effects of bullying. And Friday, we’re back with another edition of the Journalists’ Roundtable. And that is it for now. I'm Ted Simons, thank you so much for joining us. You have a great weekend.